11-26-18 Council Minutes - Laserfiche WebLink

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REGULAR MEETING November 26, 2018 Councilmember Karen White made a motion to send Bill No. 58-18 to the full Council with a favorable recommendation. Councilmember John Voorde seconded this motion which carried by a voice vote of eight(8) ayes. 60-18 PUBLIC HEARING ON AN ORDINANCE OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, AUTHORIZING THE ISSUANCE AND SALE OF AN AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $4,800,000 OF CITY OF SOUTH BEND, INDIANA, ECONOMIC DEVELOPMENT TAX INCREMENT REVENUE BONDS FOR THE COMMUNITY EDUCATION CENTER PROJECT, DESIGNATING THE BONDS AS LIMITED OBLIGATIONS OF THE CITY, AND AUTHORIZING AND APPROVING OTHER ACTIONS IN RESPECT THERETO Councilmember Karen White made a motion to accept Substitute version of Bill No. 60-18. Councilmember Tim Scott seconded this motion which carried by a voice vote of eight(8) ayes. Councilmember Gavin Ferlic, chair of the Community Investment Committee, reported that they met this afternoon and send this bill forward with a favorable recommendation. James Mueller, Executive Director for the Department of Community Investment with offices located on the 14th floor of the County-City Building, South Bend, IN, served as the presenter for this bill. Dr. Mueller stated, Good evening again, Council. This ordinance before you is making good on the MOU that you passed earlier tonight. We have our Bond Counsel, Randy Rompola, to go through any of the specifics you may have. The difference between what we heard on net proceeds of$4 million and the $4.8 million authorized here is partly for issuance costs which are slightly over $100,000 between counsel and financial advisors and going to the market. The remainder would be potentially for a debt reserves which is for if the markets are requiring a credit enhancement. We would get that back at the end and it can be used against the final payment of debt service. That is why the number is different here than the net proceeds. It will still be $4 million for the project. Randy Rompola,Attorney for Barnes&Thornburg with offices located at 100 N. Michigan Street, stated, I'm happy to answer any questions but, as mentioned, the not to exceed amount is $4.8 million.That is a not to exceed amount. I think if bonds were to be issued today,the amount would be closer to $4.6 million but because we are not issuing bonds for a period of time and we have the possibility of interest rates being a little bit higher, we have a not to exceed amount of$4.8 million.The interest rate is not to exceed seven point five percent(7.5%).The bonds may be issued on a taxable basis or tax exempt basis three (3) years down the road so we have a little bit higher not to exceed. The not to exceed term is twenty(20) years. The bonds will be payable solely from tax increment revenues from the River West Allocation area.The Redevelopment Commission did adopt a pledge resolution pledging the TIF that was described earlier to repay the debt. The ordinance also approves forms of documents including a financing agreement with the Public Library that would provide for the bond proceeds, when issued, to be allocated to the Library. Actually, the proceeds would be deposited into a trust indenture which is the other document approved by the ordinance. Any requisitions to access the money,then,would be approved by the City at the time of the issuance of the bonds. The expectation is the project itself, as was discussed earlier, would be nearly complete when the bonds are issued. So that would likely be one (1) or two (2)disbursements at that time. They would have to be approved by the City before the money would flow to the Library.The EDC did meet this morning and approved the resolution. They held a public hearing and there were no comments. Councilmember Gavin Ferlic then opened the floor to questions from Council Members. There were none. 15